Global Scans · Economy · Weekly Summary

DRIVER: The global economy still faces serious headwinds and political uncertainty potentially balanced by the enormous promise of technological advancements in many fields. Read on to get a solid handle on the opportunities and risks you and your organization may likely face and set your sails accordingly.

• The economic consequences of the succession of crises of recent years will be more visible in 2024: economic growth will be weak, and China's downturn will reverberate in emerging economies, in a climate of rapid tightening of financial conditions and a strong dollar. CIDOB
• Blockchain technology has demonstrated the potential to universally reshape the way business transacts across nearly every industry in the global economy. MIT OpenCourseWare
• Any rate cut in India will follow rate cuts in advanced economies, and not precede them. The Economic Times
• In summary, Australian governments and industry invest significant resources to reduce the risk that biosecurity threats enter Australia, and to respond to plant, animal, environmental, and social amenity threats that breach the national border. PubMed Central (PMC)
• The Indian economy could be affected, as resources may need to be directed towards defence and security rather than economic growth, which could lead to instability in the entire region. Global Youth MH
• Three other monetary decisions are expected around the wider region: On Tuesday, sticky inflation may persuade Madagascar's central bank to keep its rate at 11% for a third time in a row. Economic Times
• While cotton costs are expected to drop by another 2% this year, synthetic fiber costs are expected to increase, leading producer prices higher. Fibre2Fashion
• Both the Vancouver and Prince Rupert rail and marine corridors will benefit from particularly stronger growth in Asia driving both demand (grain, potash, energy) and production (containers) of key commodities. Transport Canada
• Japan's growth trajectory is expected to improve steadily, with domestic demand supported by stronger real wage growth, continued accommodative monetary policy, and temporary tax cuts. Fibre2Fashion
• Risks in the metal sector include a potential slowdown in global economic growth, which could dampen demand for metals. Economic Times
• Climate change will impose the highest social costs on India of any country, primarily due to its already-hot climate combined with its large and rapidly developing economy, whose growth will be curbed by climate damages such as extreme heat waves, droughts, and floods. Yale Climate Connections
• The global economy remains resilient despite what's still quite high inflation which is now getting lower, sees Australian growth slowing to 1.5% in 2024 before picking up to 2.3% in 2025 as cost of living pressures through falling inflation wane, unemployment expected to rise to 4.3% in 2025. ABC listen
• Cities are the innovation centers of the US economy, but technological disruptions can exclude workers and inhibit a middle class. Nature
• To reach the objectives of the EU Green Deal and to meet the EU's climate change mitigation and energy-mix targets for 2030, nuclear energy could offer solutions to reduce emissions in industries that have traditionally been difficult to decarbonise, through for example clean hydrogen production. EU Science Hub
• South Africa, Africa's most industrialised country, will become Africa's biggest economy with a GDP of $373 billion - a position the IMF expects it to retain until 2027. Business Insider Africa
• Even with significant reductions in CO2 emissions starting today, the global economy is poised to experience a 19% decrease in income by 2050 due to the impacts of climate change. SciTechDaily
• Global warming of 3 °C increases the risk of extreme rainfall worldwide, which reduces global GDP, on average, by 0.2% - which, at the current size of the global economy, would equal US$ 200 billion. ScienceDaily
• In the euro area and other advanced economies in Europe, activity and core inflation have fallen faster than anticipated, but labor markets remain tight and negotiated wage growth is still vigorous. IMF eLibrary
• The global negative implications become more visible in 2025, as tighter financial conditions increasingly affect activity in advanced economies (outside of the United States) and emerging markets. IMF eLibrary
• Inflation in advanced economies and emerging markets excluding China is 20 basis points lower, on average, during the 2024-26 period for both headline and core measures. IMF eLibrary
• The fall in inflation is persistent but ultimately temporary: monetary and fiscal policy accommodation help the initial shock to demand fade, and China's inflation gradually converges back to baseline after 2026. IMF eLibrary

Last updated: 14 May 2024